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Cygnus boosted by new gas allowances
Posted 26.07.2012 11:29:18 av John Bradbury
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A government announcement to provide up to £500 million in new tax allowances for shallow water gas fields has boosted the commercial viability of the North Sea Cygnus gas field ensuring it can go ahead, one of the partners has said.

Centrica says the viability of the GdF Suez-operated Cygnus gas field – described as the largest gas discovery in the Southern North Sea for 25 years will be much improved by the government's new tax allowances, ensuring the project can proceed.

Cygnus involves a £1.4 billion investment and Centrica says that the decision to grant the new field allowances for shallow water gas fields in the UK sector of the North Sea which has been announced by the UK's Department of Energy and Climate Change will “...enhance the economics of the Cygnus project, the largest gas discovery in the Southern North Sea for 25 years, which will enable Centrica to proceed with the development.”

Up to 80% of the £1.4 billion to be invested by the Cygnus partners will be spent in the UK, Centrica has indicated. “The direct tax revenues are likely to be around £1bn over the lifetime of the field – c. 20 years.”

And: “The development is expected to create around 4,000 jobs in the UK across the supply chain. At peak production, the field would account for around 5% of the UK’s total gas production, enough to meet the demand of nearly 1.5 million homes.

Centrica's chief executive Sam Laidlaw says that as the UK becomes increasingly dependent on imported gas, the announcement on allowances represents a significant boost to the UK’s long term energy security as well as creating much needed jobs.

“For Centrica, this is an extremely significant project as we look to unlock remaining gas in the North Sea, securing UK gas supplies for our customers,” Laidlaw added.
 
Cygnus is due to come onstream by the end of 2015 with a multi-platform development in the UK sector of the Southern North Sea.

Up to 4,000 jobs will be created by the Cygnus project across the UK energy supply chain, Centrica says. “At peak production, the field would account for around 5% of the UK’s total gas production, enough to meet the demand of nearly 1.5 million homes.”

The new shallow water gas field allowances were part of a wider announcement by DECC suggesting up to £25 billion of energy investment could be brought forward by 2013 and 2017 under a programme of support for renewable energy technologies.
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